Pat: Utter gibberish and utterly divorced from reality.
Goldman had NO counterparty risk with AIG at all. Their position was nearly fully collateralized through cash and securities and the balance was covered by insurance (in the form of CDS).
You might want to assemble the actual facts before weighing in on a topic.[/quote]
I don’t think gibberish. I’ll take your word that some of it was collateralized, though some reports I’ve found indicate that it was much less than the $11,000,0000 that you suggested.
On the insurance part, AIG is an insurance company. CDSs ARE insurance. If they go bankrupt, insurance claims against them are general credit obligations. Those contracts would have been examined and probably never sorted out. Hence my claim yesterday that it would last 10 years.
